Oil prices rose today, Friday, June 17, 2022, with continued supply tightening and new US sanctions to limit Iranian oil exports.
Crude prices had started trading lower, with concerns about demand emerging in the wake of US interest rate increases.
Oil Prices Today
The price of the futures contracts for the benchmark Brent crude – for delivery next August – increased by 0.34%, to reach 120.10 dollars per barrel.
The price of West Texas Intermediate crude futures – for delivery next July – also increased by 0.09%, recording $117.45 a barrel, according to data seen by the specialized energy platform.
Oil prices ended their trading with a rise of about 2% yesterday, Thursday, after a volatile session.
Oil prices are struggling to avoid losses, as Brent crude futures are heading to record their first weekly decline in 5 weeks, while US crude futures will witness their first drop in 8 weeks.
“Brent and WTI saw some heavy selling during the day as markets tried to price a slew of central bank rallies and potential recessions,” said Jeffrey Haley, senior market analyst, Asia Pacific at Oanda.
“Unfortunately, none of that changes the fact that despite these risks, the world continues to suffer from shortfalls in OPEC+ crude supply and global refining capacity, which is putting pressure on gasoline and diesel prices to rise in the embrace of stagflation.”
Central banks across Europe raised interest rates on Thursday, some by shocking amounts, and hinted at higher borrowing costs to cool soaring inflation that is eroding savings and squeezing corporate profits.
In South America, the Argentine Central Bank, yesterday, Thursday, raised the benchmark interest rate by the largest amount in 3 years, as it fights inflation, which exceeded 60%.
The moves came on the heels of the US Federal Reserve raising interest rates by 75 basis points, the highest level since 1994.
Lack Of Supplies
However, investors remained focused on supply shortages after the United States announced new sanctions on Iran.
“The market has been watching negotiations between the West and Iran in anticipation of the nuclear deal’s revival in recent months. This has refocused on ongoing supply-side issues in the market,” ANZ Research analysts said in a note, Reuters reported.
On Thursday, Washington imposed sanctions on Chinese and Emirati companies and a network of Iranian companies that help export Iranian petrochemicals, in a move that may aim to increase pressure on Tehran to revive the 2015 nuclear deal.